Professor Mazzucato has also recently been awarded another €250K grant from the Horizon 2020 programme for ‘DOLFINS- Distributed Global Financial Systems for Society’, which aims to address the global challenge of improving the financial system to better serve society, placing scientific evidence and citizens participation at the centre of the policy process in finance.

The ISIGrowth project is ground-breaking on several levels - theoretical, methodological, policy-focused, and in its use of engagement with stakeholders to both gather and disseminate knowledge. Details of the project, its partners, publications and events, can be found on the ISIGrowth website.

The great recession (2008-13) has highlighted the long-term structural imbalances that have accumulated over thirty years in Europe, as well as the ineffectiveness of standard policy instruments to put EU economies back on steady growth paths.

Given this context the project will study the non-linear relationships between innovation, employment dynamics, inequality, environmental sustainability, structural change, globalization of production and growth. The aim is to develop inclusive and sustainable policy scenarios, alternative to the current emphasis on austerity, and challenge the types of ‘financialization’ that many economies have faced over the last decades.

Furthermore, the project aims to deliver a coherent policy toolkit to achieve the Europe 2020 objectives of smart, sustainable and inclusive growth. It will combine frontier empirical analysis with micro—macro models that take into account the complexity and systemic nature of innovation, inequality, and economic growth. In a world of highly globalised, financialised and interconnected economies, policy measures will be studied in the way that they interact in shaping different possible growth paths. Working from the premise that the economy and its main underlying domains such as technologies, agents, social relations and institutions should be studied by considering their complex system nature, the researchers will use tools from complexity theory, such as agent based modeling.

In order to deliver comprehensive diagnostics and a coherent set of policy tools, the team will undertake analysis from several highly complementary angles, and identify a number of key cross-cutting themes covering policy areas such as innovation policy, fiscal policy, industrial policy, education policy, and cohesion policy.

Mariana Mazzucato, principal investigator for SPRU said: “More than ever, it is evident that markets alone cannot ensure the strong economic growth required to approach full employment, even in the presence of extraordinary and unconventional policy support. ‘Animal spirits’ of business cannot be assumed; they must be created. This poses massive challenges for public policy beyond fixing markets. We will study the interaction between fiscal policies, innovation policies, and aggregate demand—bringing the work of Keynes and Schumpeter together in a dynamic way.”

Maria Savona said “One of the challenges of the project will be to reconcile the post-crisis tendency to “re-industrialise” Europe in a global context where structural change and industrial policy must de-materialise economies to ensure environmental sustainability and at the same time aim towards full employment”.

A crucial distinctive feature of the ISIGrowth approach is the development and evaluation of new policy initiatives in close coordination with stakeholders and policy makers. A Civic Action Network (CAN) and a Business Forum (BF) will provide a platform for continuous feedback and consultation with leading representatives of European civil society and industry. Furthermore, the ISIGrowth members will be in regular contact with national and European policy makers through established linkages and dedicated policy forum events.

ISIGrowth is a collaboration with six other universities across Europe as well as Columbia University in the States and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The project is coordinated by Professor Giovanni Dosi, a world-renowned scholar in evolutionary economics, at Sant’Anna Institute for Advanced Studies at the University of Pisa. The partnership builds on a collaboration begun in a previous EU FP-7 funded project coordinated by Professor Mazzucato, Finance, Innovation and Growth (FINNOV).